The prosecutor leading South Korea’s investigation into the collapsed Terra-Luna crypto project said its founder Kwon Do-hyeong should be extradited to Seoul to face trial, the Wall Street Journal reported May 5. Kwon is currently detained in Montenegro for allegedly traveling on a forged passport and South Korea and the U.S. have both requested his extradition to face charges related to the collapse of his US$40 billion crypto empire.

See related article: From billionaire to Montenegro jail: The rapid rise and fall of Terra chief Do Kwon

  • Terra’s USD stablecoin and sister cryptocurrency Luna collapsed in May 2022 and both South Korean and U.S. prosecutors say the crypto project was designed to defraud investors and violated financial laws in both countries.
  • Dan Sung-han, the director of Seoul Southern District’s joint financial crimes team, said in the Journal interview that most of the evidence and key accomplices in Kwon’s alleged crypto fraud are based in South Korea. Kwon is a South Korean national.
  • If convicted, Kwon may face over 40 years in prison, which would be the longest sentence ever in the country for a financial crime, Dan told the Journal.
  • Kwon has repeatedly denied all the allegations against him, maintaining that mistakes were made in the Terra-Luna crypto project managed by his Terraform Labs, but it was not designed to deceive investors.
  • On April 25, Seoul prosecutors indicted Terraform Labs co-founder Shin Hyun-seung and seven Terra associates for alleged fraud, and two additional Terra associates for alleged bribery. Shin has also denied all the allegations. 
  • South Korea issued an arrest warrant for Kwon in September 2022, but authorities have yet to interview him. He was said at the time to be living in Singapore, where Terraform Labs was based, before leaving to Serbia and then being apprehended in Montenegro on March 23. 
  • Kwon’s court hearing in Montenegro will take place on May 11.

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